Key Points

Equities, in the U.S. and abroad, remain in consolidation mode. The S&P 500 has made no progress, on a closing basis, for three weeks. Likewise, the trends in rates have been stalling as the 10-year trades between key support and resistance levels. Stalling can be a form of time-based correction that serves to refresh the prevailing trends, which is the most likely scenario currently. 

U.S. Equities 

The S&P 500 traded to a new high last week but selling pressure on Friday pinned the close to the lower end of the weekly range. The trend remains to the upside, with the index trading above the rising 10-week moving average. The 14-week RSI remains in an overbought condition for a third consecutive week, and we note that, as overbought conditions have persisted, the S&P 500 has closed at essentially the same level for the past three weeks. 

In the near-term, support comes into play near the 4,000 level, which lines up the moving average. Stronger support for the uptrend from the 2020 low is near 3,700.

The S&P Small Cap 600 Index has made little, to no, progress for the past five weeks, remaining in a consolidation above the rising 10-week moving average and price-based support. The 14-week RSI continues to hover near overbought levels. Below the moving average, support is near 1,200 in the near-term. More important support is near 1,100, which lines up with the 2018 highs. On the upside, resistance is near the March highs at ~1,400.

On a relative basis, small caps continue to fade from resistance.

At the sector level within the small cap universe, Energy was the standout on the week, adding more than 5%, but remains in a near-term downtrend since peaking in early March. While Discretionary, Real Estate, and Financials were the other groups to finish higher on the week, all remain rangebound in the near-term, in line with the broader Small Cap index.

The Nasdaq Composite Index remains above the 10-week moving average and in the consolidation that has been playing out since the February peak. The 14-week RSI is holding in a bullish regime, just below the 70 level. Support remains in line with the September high and the March low, near 12,000.

On a relative basis, the NASDAQ continues to test support and has made no progress since July of last year.

U.S. Fixed Income

The 10-year yield remains below resistance at the 2019 consolidation zone. After becoming extremely overbought in February during the spike in yields, the 14-day RSI has moved lower but remains in a bullish regime.

The yield has pulled back to test the rising 50-day moving average. Holding this level with the RSI remaining above 40 would keep the structure of the uptrend from the August low in place and increase the odds that resistance will break.

Looking across the Treasury curve, there is not much that has changed over the past week with the short-end pinned to the bottom of the chart while the long-end has seen yields fall after the 20-year and the 30-year tested (and faded from) resistance.

Global Equities

The Dow Jones Global World Stock Index (Excluding U.S.) remains above the 10-week moving average, but like markets in the U.S., closed near the low of the weekly range. The 14-week RSI continues to point to bullish momentum, increasing the odds that the current consolidation will resolve to the upside.

On a relative basis, the Global Dow has been building a base for more than a year and is now testing the lower end of the range. A break to the downside would serve to disprove any thesis that calls for outperformance on the part of international stocks (as a group) relative to the U.S. equities.


The Bloomberg Commodity Index turned in another strong week and is now pushing to the top of the consolidation range that has been in place since 2016. The index remains above the 10-week moving average and the 14-week RSI confirms the bullish trend.

Looked at as an asset class, relative to the S&P 500, the trend of commodity underperformance has not yet ended, but zooming in (smaller, inserted chart), we can see the relative line making a turn higher last week.

Within the commodity complex, strength was, once again, seen in the agricultural commodities as their parabolic move to the upside continues. Industrial metals also remain strong (led by copper). Precious metals are under pressure and continue to trade in a near-term downtrend. Finally, Energy is in a consolidation just below resistance. 

The U.S. Dollar

After falling for three consecutive weeks, the U.S. Dollar index rallied last week but remains below the 10-week moving average while the 14-week RSI trades in bearish ranges.

Dollar weakness is a tailwind to the strength in the commodity market.


Equities in the U.S. and globally continue to trade in the consolidations that have been in place for multiple weeks. We view these consolidations as playing out within the framework of long-term uptrends. They are essentially “pauses that refresh” and, assuming that important support levels are maintained, prior uptrends will likely reassert. 

The biggest question for the market to answer is, “will rates continue higher?” The 10-year is at a key level, above support at the moving average but below price-based resistance. For now, deferring to the uptrend likely makes the most sense.

Disclosure: This information is prepared for general information only and should not be considered as individual investment advice nor as a solicitation to buy or offer to sell any securities. This material does not constitute any representation as to the suitability or appropriateness of any investment advisory program or security. Please visit our FULL DISCLOSURE page.